No-one seeking to lead our nation should be making economically illiterate claims about No Deal

No-one seeking to lead our nation should be making economically illiterate claims about No Deal

One would have thought that the Conservative Party would have got the message. Maybe they have, maybe they haven’t. Time will tell – but the early signs are not very good.

No sooner had three of their leadership candidates Boris Johnson, Dominic Raab and Esther McVey stated the obvious that the UK needs to leave the EU by 31st October, deal or no deal, than Jeremy Hunt went on air to say ‘no deal would be a disaster for the country’ and that he would seek to re-open Theresa May’s Withdrawal Agreement.

Then Chancellor Philip Hammond darkly implies that there is ‘no mandate for no deal’ and that he might support a vote of no-confidence in any Conservative government which tried to leave on those terms. What part of misunderstanding the desires of their core support do they not get?

65% of Conservative supporters voted Leave at the 2016 referendum. The Conservative Party saw their share of the vote drop from 23% (already an all-time low) at the 2014 European election to 9.1% when the votes were counted for this year’s contest a week ago. That is a loss of almost two thirds of their support. It was their worst performance ever since the modern party’s foundation in 1832.

Any third-rate marketing executive would tell you that if you alienate your core market, you shouldn’t be surprised if they shop elsewhere. Would Marks and Spencer be foolish enough to ditch their core clothing offering and replace it with teeny bop fashion? Or perhaps Waitrose Cellar might ditch the wine and offer just brown ale instead? Maybe Tottenham Hotspur should start to offer Arsenal shirts to please everyone?

Well the Conservative Party has done just that. Theresa May’s fixation with a non-Brexit Brexit where the UK’s ability to change even one directive would have been severely questioned, caused this mess. She did not believe in Brexit; she saw it as a damage mitigation exercise and the EU quickly spotted their opportunity to try and unwind the whole thing, with a large part of our establishment cheering them on from the side-lines.

While Global Britain is impartial party politically, we can give the Conservatives one brief free piece of advice at this critical time, as they choose their next leader. If they believe the public will tolerate a Brexit in name only, while waging war on sincere Leave supporters by treating them as though they are economically and culturally illiterate – as Hunt, Hammond and Co appear to – don’t be surprised if the two thirds of your support who voted elsewhere last week, make a permanent habit of doing just that.

The EU are very unlikely to materially change their offer in the short term. They judge that the UK Parliament largely wants to unwind Brexit and if they play hard ball, the whole process can be stopped and the UK can slope back in, and sit on the naughty step for a few years while they finish of their business of creating a fully federal EU. They see fear in the eyes of many of these grey candidates who choose spin over substance.

The EU will be clear that that is the deal, perhaps a warm hug here and a fresh promise there, but they will believe these ‘middle ground’ (continuity Remain to you and me) candidates will buckle and accept ‘colony status,’ as they have so accurately called it.

Those candidates deliberately undermine our negotiating position. They adopt the language of Osborne, Starmer and Sturgeon that ‘no-deal Brexit’ would be an economic catastrophe. They talk in such certain terms as if this was a fact.

Let’s be clear, it is only a fact in their imagination. It is a disputed thesis which was tested during the EU Referendum. The other side defined Leave as leaving the Single Market, customs union, ECJ the lot, and they said it would be a disaster. A 5% fall in GDP was predicted, 500,00 jobs immediately lost. Foreign investment would dry up. These warnings were then backed up by even more craven and unprofessional predictions by the Bank of England.

Some of the senior members of the Conservative Party continue to spout this nonsense. In doing so they are damaging confidence in the UK and perhaps the very integrity of the nation. These false warnings are picked up Nicola Sturgeon and others who seek to break up the UK.

This author runs an economic consultancy. We have consistently argued that Brexit in itself is not a major economic event, but a process which gives the UK every opportunity to perform so much better over time, than the dull under performing conformity of the EU.

If the UK follows a reasonably open, stable course with no arbitrary policy set, sensibly improving and reducing stifling EU regulation, the country can become a magnet for the world. Adopt arbitrary taxes, gold plate regulation and destroy confidence, and it will not have been a success. But frankly parrot a false thesis that ‘no-deal’ is a catastrophe and you do yourself no favours, as such analysis is economically illiterate in our judgement.

Let us briefly remind our foes what really has happened since the EU referendum. Has unemployment increased by 500,000 as the Treasury predicted? No, employment has grown by 900,000 with the rate of unemployment the lowest since 1974. Did the economy collapse by 5% as the Treasury again predicted? No, it grew each and every year – in sharp contrast to Italy and Germany. Did the consumer get squeezed? No, real wages picked up markedly and continued to do so. Indeed, so strong have the tax receipts been that the next Prime Minister perhaps has £20 billion to invest in tax cuts or public spending, or a mixture of both, dependent on choice.

If only the Remain-backing leadership candidates would look at the big picture, they might see opportunity not despair. It is an interesting question why those who seek the top job seek to talk this great nation down and with it risk confidence and growth, when the underlying position – despite their chronic lack of leadership – is so positive and strong. Surely they have got the message? If they continue down their imagined damage limitation exercise, history will see that the Conservative Party is just that, history.